For years, "technology" and "risk" seemed synonymous. There was a stark difference between the organizations that adopted digital technology early versus those who chose to sit back and let digitalization come to them. Acord, the standards-setting body for the global insurance industry, conducted a study in 2022 across 200 of the world’s largest insurance companies and found that fewer than 25% of insurers have truly digitized the value chain, while more than 10% are not appreciably leveraging digital technologies within their current business processes. While the insurance industry has been slow to feel the effects of digital transformation, primarily due to regulation, legacy IT systems, and the fact that new entrants do not have the required capital to take on insurance risk, it only seems fitting that if everything else has gone digital, insurance should too.
Disruption in the Insurance Industry
Insurers must realize how digital transformation can play a crucial role in positively changing the industry for their businesses and customers. For example, the use of technology in the motor vehicle industry has enabled insurance companies to take a more active approach to mitigate and prevent risks rather than reactively insure against them. This statement is especially true when you consider that auto insurance premiums in the U.S. are continuously decreasing and could fall as much as 25% by 2025 due to the proliferation of safety systems and autonomous vehicles (AVs).
There's also the imminent advantage that businesses gain when they can access, collect, and analyze customer data; for insurers, there's a lot of it. Digital technology, combined with data and analytics, allows insurers to understand their customers better and offer targeted, more personalized products that lead to higher customer satisfaction, retention, and lifetime value. Leveraging data will also enable insurance companies to price, underwrite, and identify fraudulent claims more accurately while cutting significant costs across the value chain. When used correctly, automation can reduce the cost of the claims journey for insurers by up to 30%.
Digital Proof of Insurance & Digital Verification
Although the insurance industry is still in the very early stages of digitalization, one area has started to gain traction: digital proof of insurance, also known as Electronic Proof of Auto Insurance (EPAI). Digital proof of insurance is exactly what it sounds like; an electronic version of a traditional insurance certificate (like a pink auto vehicle slip) loaded onto a customer's mobile wallet or in their insurance provider's app. Insurance customers can now carry a digital copy of their documents on their smartphone and no longer have to worry about digging for paper insurance documents or cards when critical situations or accidents arise.
Digital proof of insurance also introduces another important topic: digital verification. Digital verification is a process that validates a person's identifying traits and verifies them against an actual, physical human. Digital verification specifically offers a seamless and optimized method for authenticating customer identities and their insurance documents in a highly secure, convenient, and efficient way.
Benefits of Digital Proof of Insurance
We all know what it's like to misplace something important, including paper insurance certificates. Here are a few reasons why digital proof of insurance can change that for customers:
- Ease of use - Digital insurance cards are simple, efficient, and easy to use for customers and law enforcement officers. When it comes to run-ins with the law (hopefully only a few), users can access their digital documents anytime, which helps streamline the user verification and insurance validation process for all parties.
- Traceability - Since digital insurance cards live on customers' mobile devices, it becomes virtually impossible for users to lose or forget them. There's no more rummaging for insurance slips in wallets and glove boxes, and no more constant worry about running into law enforcement when you know you've misplaced your proof of insurance.
- Reliability - Even if you lose your phone, a digital copy of your insurance is always available; all you need to do is verify your identity. Digital proof of insurance also helps prevent insurance fraud by ensuring that vehicle, travel, health, and other insurance products are all uniquely issued to one person and one person only.
- Real-time updates - Since everything is digital, it only makes sense that your information should be automatically updated when there are changes to your insurance. Whether it’s a renewal, upgrade, or expiry, your mobile digital proof of insurance reflects every change in real-time.
Digital Insurance Has Room to Grow
While digital proof of insurance is now being piloted as an acceptable form of insurance in select regions across North America, the concept is still relatively new, and many hesitations toward digitized insurance still exist; the obvious one being data privacy. Experts have expressed concerns about the safety and security of personally identifiable information (PII), especially when customers are required to hand over their unlocked phones to show in-app EPAI.
Another concern with digital insurance is the potential risks that mobile devices could bring in an emergency, such as leaving customers stuck in scenarios where their device is unavailable because of a drained battery, damaged screen, or simply poor signal. Regardless of the circumstance, users are still responsible for ensuring they can display their electronic proof of insurance. As a result, digital proof of insurance is not yet mandatory, nor is it completely replacing the traditional paper form. Still, it’s providing an increasingly easy way for insurance verification.
How Fobi's Insurance Pass Elevates Digital Proof of Insurance
With privacy and mobile concerns holding the insurance industry back from transformative digitalization, it's time for some change. Working with 4 of the top 10 global insurance companies, and over 15 insurance companies overall, this is where Fobi's Insurance Pass comes in. Our team of experts in data compliance will help you make digitizing proof of insurance seamless and offer a quick and easy way for customers to access critical insurance information when they need it most.
Using the Fobi Wallet Pass platform, a key feature of the Insurance Pass is that no app is required at all. Digital proof of insurance lives directly in customers' mobile wallets with immediate access from the lock screen. Since apps typically require an Internet connection and multiple touchpoints, the Insurance Pass is an even more convenient and reliable tool for digital proof of insurance—one that can be opened and accessed immediately. When incidents arise, drivers can simply open their wallet passes to contact their insurer and exchange information. Smartphone cameras can also be used to scan the pass’ QR code, where the drivers’ information can be automatically sent to their insurance company to speed up claims processing. To address privacy and security concerns, the Insurance Pass only shows enough relevant information to verify the driver's identity and proof of insurance without displaying any personally identifiable information.
Fobi's Insurance Pass also includes a back-of-the-pass hub that enables insurers to simplify the onboarding process by reducing friction at the point of purchase and making proof of insurance documents even easier to obtain and use. Any branded imagery and links can be easily added and updated to the Insurance Pass in real-time, allowing customers to quickly access links to their most essential insurance activities, such as filing a claim, booking appointments, renewing their insurance, or viewing offers and promotions. Most notably, the Insurance Pass and hub enable insurance companies to segment customers and send targeted, personalized messaging through direct-to-lock screen push notifications and SMS. For example, insurers can send updates straight to their customers' phones, reminding them about upcoming appointments, insurance expiries, and renewal dates.
Slowly But Surely, A Digital Future for Insurance
Insurance is only one of the many industries that have taken their time with digitization, but technology disruption is still imminent. Although relatively new initiatives are pushing insurers closer and closer to digital transformation, like digital proof of insurance, adoption is still far behind where it could be. Solutions like Fobi's Insurance Pass can change that.
Want to find out how your insurance company can use Insurance Pass to get ahead of your competitors? Click here to learn everything you need to know about Fobi’s digital solutions for the insurance industry and read our release about Fobi’s latest insurance deal with a leading global insurance provider.
